Home / Draft implementation regulations for labour contract law issued

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The Legislative Affairs Office of the State Council
issued draft implementation regulations for the Labour Contract
Law on Thursday to solicit public opinions.

The Labour Contract Law, which took effect on January 1,
caused confusion and anger among employers as it entitles
employees of 10 years’ standing to sign labour
contracts with no fixed termination dates.

The draft regulations focus on the terms of labour
contracts, economic compensation after labour contract
termination and the dispatch of workers.

Since the law was issued by the State Council and not by the
labour ministry, the draft implementation rules aim at making
all local governments strictly comply with the Labour Law, said
Zhao Deming, senior partner at HaoLiWen PRC Attorneys. The
labour ministry does not have authority over local governments,
he added.

Zhao also said that the rules fail to clarify whether or not
the second or third renewal of a labour contract will result in
an open-ended term, nor did the draft provide a clear
definition of equal consultation.

"It may be a good thing, because the government will have to
decide how to implement the equal consultation under the labour
contract law," he said.

The labour law has had a huge impact on employers. Many of
them have already moved offices or manufacturing factories as
the law increases their operating costs and creates
uncertainty. As a result, the law raises the level of
unemployment Zhao added.

"There is much room for improvements in the draft as some of
the wording may create new problems and controversy," he
said.